The National Science Foundation (NSF) announced at the end of July that it is setting up a public–private partnership to turn the most promising breakthroughs from its funding portfolio into successful start-ups. The partnership, called Innovation Corps (I-Corps), will teach participants the basics of entrepreneurship, connect them with mentors, and provide $50,000 in seed funding. This is essentially a Silicon Valley-style incubator for scientists and engineers.
If past is prologue, the vast majority of the start-ups to emerge from this program will fail. Even venture capitalists only claim to have a one-in-ten batting average. The government can’t possibly do better. But I am optimistic that I-Corps will be a game changer. In the long term, it will likely produce returns that are orders of magnitude greater than the $5 million per year that will be spent. That’s because it addresses one of the core problems of the university research system, narrowing the gap between science and innovation.
In a previous column, I discussed the wealth of opportunity that lies in our university research system. It is an untapped gold mine of innovation. Every year, about $50 billion of research funding goes in and $2 billion of license revenue comes out. We could be doing much better.
To start, the current university licensing system encourages faculty and researchers to focus more on publishing academic papers than on commercializing research. And once an idea is first published, it can’t be patented or licensed.
Then there is the issue of knowledge and funding. University researchers who long to see their work impact society don’t know how to make it happen. And government grants don’t allow them to do much more than publish their findings. The hardest parts about commercializing scientific discoveries are real-world testing and pinpointing market demand. Since these developmental stages are rarely reached, discoveries are left to collect dust on university shelves.
This is the void that I-Corps can fill. It provides the education, seed funding, and mentorship that university researchers need. I-Corps is also sending a clear message to academia that the taxpayers who fund university research want a bigger bang for their buck.
The NSF couldn’t have picked better partners for this program. Both the Kauffman Foundation and MIT’s Deshpande Center have been testing new approaches to university research commercialization. The Deshpande Center was founded in 2002 with an investment of $20 million from Gururaj “Desh” Deshpande. The goal was to connect university faculty with the business community so that faculty could learn the skills necessary to create inventions that solve real needs. The experiment has been successful. So far, the center has funded more than 80 projects with over $11 million in grants. Twenty-three companies have been started and have collectively raised over $300 million in outside financing.
Kauffman Foundation analyzed Deshpande’s and other commercialization centers’ best practices. Three years ago, it launched the Kauffman Laboratories for Enterprise Creation. Kauffman tested whether an innovator can be trained to become an entrepreneur, and learned that innovators are well prepared for the task, but that the transition required careful preparation. So it developed a curriculum to teach post-doctoral researchers how to validate their market, perform effective customer development, understand funding options, build a team, develop sales and presentation skills, and plan for scale.
Kauffman found that post-docs with entrepreneurial training served as critical bridges between the university and the businesses that were interested in licensing university technologies. And their training had a ripple effect: The post-docs were imparting their knowledge to their faculty advisors and colleagues.
That is the effect that I-Corps could have on the university research system. I hope it will start the process of cultural change so that universities become more accepting of entrepreneurship. This could create the needed momentum from within the universities to start turning more research into invention.